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SBS Group (SBG)

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Monday 30 April, 2001

SBS Group

Interim Results

SBS Group PLC
30 April 2001

                      SBS Group plc
                            
  SBS Group plc, the AIM-quoted specialist IT staffing
  business, today announces interim results for the six
             months ended 28 February 2001.
                            
                       Highlights

* Group  turnover  increased by  0.9%  to  £23.1m  (2000:
  £22.9m)

* Gross profit increased by 8.5% to £4.6m (2000:  £4.2m)

* Group  operating  profit before  goodwill  amortisation
  and exceptionals £437,000 (2000:  £553,000)

* Loss  before tax was £388,000 (2000: profit before  tax
  £124,000)

* Loss   per   share   before   exceptional   items   and
  amortization  was 0.2p (2000:  earnings  per  share  of
  2.3p)


Commenting on the results, Peter Toynton, Chairman of SBS
said:

'We  anticipate  that  this  year  will  be  particularly
challenging compared to our optimism in September.

However, although economic indicators remain uncertain we
believe  our business model remains sound and that  there
will continue to be a demand for high calibre IT skills.

Whilst  we  have adopted a prudent approach to  costs  in
light  of  market conditions, our aim is to mitigate  the
impact   of   currently  weakened  markets  through   our
geographic  spread  and  through development  of  related
business.  Accordingly,  we are  undertaking  a  detailed
review  of  our  business strategy in  order  to  exploit
current  strengths and identify and develop new  business
opportunities.'


For further information please contact:

SBS Group plc
Gary Jones, Chief Executive                 020 7420 6700
Phil Holt, Chief Operating Officer and Finance Director

Golin/Harris Ludgate
Richard Hews                                020 7324 8888
Trish Featherstone


Chairman's Statement

Introduction

In  the 2000 Annual Report we anticipated that the IT and
Telecom   sectors  would  continue  to  show   signs   of
turbulence but that our market would recover during  this
calendar  year. As we now know, the slowdown  in  the  US
economy  and, in particular, the IT and Telecom  Sectors,
has been far worse than anticipated.

As  a  consequence of the impact on our US  business,  we
issued  a  trading update on 27 February 2001  announcing
that  our  profits for the year to August 2001  would  be
below market expectations.

In the trading update we cited the particular weakness of
the  US  telecoms  sector as being  the  major  cause  of
concern.  This has proved to be the case, and, as yet, we
have not witnessed any upturn in this business sector.

Also  in the trading update we noted that our US business
suffered  a significant drop in the number of contractors
in  October  2000  due  to  two of  our  clients  ceasing
operations unexpectedly.  I am glad to report  that  this
area  has  shown  steady  growth since  October  and  has
partially recovered the lost business.

Trading  in Europe has been in line with our expectations
and  UK  trading has continued to strengthen  since  last
summer  although uncertain conditions currently  prevail,
particularly in the wake of the US slowdown.

Financial Results

Group turnover for the period increased by 0.9% to £23.1m
(2000:  £22.9m).  This included a full six months trading
from Applied Concepts Inc. ('ACI') acquired at the end of
October 1999.

Gross  margin  as a percentage increased  to  19.9%  from
18.5%  due  to  the greater proportion  of  business  now
located  in  the  US and the contribution from  permanent
placement, both areas operating at higher margins.

Administrative Costs

Administrative  costs include a full six  months  of  ACI
acquired in October 1999 as well as general investment in
the US during the second half of last year to support the
growth in the market during that period.

Exceptional Items

Exceptional administration costs represent reorganisation
and  redundancy costs to reduce the ongoing cost base  in
line  with  recent  trading,  particularly  in  the   US.
Explained in note 3.

Loss  per share before exceptional items and amortisation
was  0.2p  (earnings per share 2000: 2.3p). The Board  is
not recommending payment of an interim dividend.

Shareholders'  funds stood at £2.2m on 28  February  2001
(31  August  2000: £2.5m) after writing off  goodwill  of
£7.4m in earlier years. The Group's gearing stood at 413%
at 28 February 2001 (31 August 2000: 366%)

Operational Review

SBS Group is a leading international IT staffing business
operating in three major geographical markets: the United
Kingdom, Continental Europe and North America.

Group  turnover  and  operating profits  (before  central
overheads)   for   the  six  months   can   be   analysed
geographically as follows:

                                              £m    % of Group
                     £m   % of Group   Operating     Operating
               Turnover     Turnover   Profits *       Profits

United Kingdom      9.8         42.4       0.355          44.9

Continental Europe  4.3         18.6       0.089          11.3

North America       9.0         39.0       0.347          43.8

*before goodwill amortisation and exceptional items
  
The   monthly   average  number  of  IT  contractors   on
assignment was 517 compared with 546 in the first half of
last year.

In  the  UK,  we  were  able to increase  the  number  of
contractors on billing substantially. The daily  rate  of
pay  to  IT contractors in the UK remained static  during
the  six  month  period and showed no increase  over  the
corresponding period last year.

In  response to the slowdown in the US, we reduced  costs
but remain structured to seek market share.

Our school teacher supply business, Headline, had another
successful six months, increasing its turnover to  £0.63m
(2000:  £0.61m) and maintaining its operating  profit  at
£0.03m.

Board and Employees

Several  changes to the Board of Directors have  occurred
during  the period. As previously announced, Philip  Holt
took on the responsibility of Chief Operating Officer  on
1  October  2000,  in addition to that of  Group  Finance
Director.

Tony  Cotton retired as Director of Continental  European
Operations  on  31  December  2000,  but  continued   his
involvement with the Group in a part-time consulting role
which has now been completed. Again we thank Tony for his
contribution to the Group over the last three years.

Our Non-Executive Chairman, John Davies, retired from the
Board in March due to his increasing responsibilities  as
Chief  Operating  Officer of one of BT's  UK  operations,
which  prevented  him from carrying  out  his  duties  as
Chairman of SBS. The Board is extremely grateful to  John
for his role in guiding SBS through its AIM flotation  in
1997 and in its growth as a public company.

I was pleased to accept the board's invitation to take on
the role of Chairman.  The board will continue to seek to
strengthen the management team and the appointment  of  a
new  Finance  Director  and  an additional  non-executive
director will be part of this process.

The Board is very grateful to all the company's employees
for  their  continuing contribution to the Group  through
this period of market turbulence.

Outlook

We   anticipate  that  this  year  will  be  particularly
challenging compared to our optimism in September.

However, although economic indicators remain uncertain we
believe  our business model remains sound and that  there
will continue to be a demand for high calibre IT skills.

Whilst  we  have adopted a prudent approach to  costs  in
light  of  market conditions, our aim is to mitigate  the
impact   of   currently  weakened  markets  through   our
geographic  spread  and  through development  of  related
business.  Accordingly,  we are  undertaking  a  detailed
review  of  our  business strategy in  order  to  exploit
current  strengths and identify and develop new  business
opportunities.



Peter Toynton FCA
Chairman

27 April 2001



SBS Group plc
Consolidated Profit and Loss Account
For the six months ended 28 February 2001

                      6 months to   6 months to  12 months to
                      28 February   29 February     31 August
                             2001          2000          2000
                      (Unaudited)   (Unaudited)     (Audited)
               Notes        £'000         £'000         £'000

Turnover           2       23,106        22,866        46,444

Cost of sales            (18,508)      (18,627)      (37,279)
                       ----------    ----------    ----------
Gross profit                4,598         4,239         9,165
Administrative expenses   (4,161)       (3,686)       (7,784)

Exceptional
 administrative
 expense           3        (259)          (85)         (216)
                       ----------    ----------    ----------

Group operating profit
 before goodwill
 amortisation                 178           468         1,165

Goodwill amortised          (156)         (101)         (242)
                       ----------    ----------    ----------

Group operating profit         22           367           923

Net interest payable        (410)         (243)         (638)
                       ----------    ----------    ----------
(Loss)/profit on
 ordinary activities
 before taxation   2        (388)           124           285
Tax on (loss)/profit
 on ordinary
 activities        4           96          (41)          (89)
                       ----------    ----------    ----------

(Loss)/profit for
 the financial period       (292)            83           196

Dividends          6            -          (82)         (182)
                       ----------    ----------    ----------

Retained (loss)/
 profit                     (292)            1             14
                        =========     =========     =========

Earnings per share
 before goodwill
 amortisation and
 exceptional
 costs (p)         5        (0.2)           2.3           5.5

Earnings per
 share (p)         5        (3.2)           0.9           2.2

Fully diluted
 earnings per
 share (p)         5        (3.2)           0.9           2.1



SBS Group plc
Statement of Total Recognised Gains and Losses
For the six months ended 28 February 2001

                      6 months to   6 months to  12 months to
                      28 February   29 February     31 August
                             2001          2000          2000
                      (Unaudited)   (Unaudited)     (Audited)
                            £'000         £'000         £'000

(Loss)/profit for the
 financial period           (292)            83           196
Currency translation
 differences on foreign
 currency net investments    124             47            34
                       ----------    ----------    ----------
Total recognised gains
 and losses relating to
 the period                (168)            130           230
                        =========     =========     =========



SBS Group plc
Reconciliation of Movements in Shareholders Funds
For the six months ended 28 February 2001

                      6 months to   6 months to  12 months to
                      28 February   29 February     31 August
                             2001          2000          2000
                      (Unaudited)   (Unaudited)     (Audited)
                            £'000         £'000         £'000

(Loss)/profit for the
 financial period           (292)            83           196
Dividends                      -           (82)         (182)
                       ----------    ----------    ----------

                            (292)             1            14

Other recognised gains
 and losses relating
 to the period                124            47            34

New share capital
 subscribed                     -            20            21
                       ----------    ----------    ----------

Net (deduction)/
 additional to
 shareholders funds         (168)            68            69

Equity shareholders
 funds at start of
 period                    2,453          2,384         2,384
                       ----------    ----------    ----------

Equity shareholders
 funds at end of
 period                    2,285          2,452         2,453
                        =========     =========     =========


SBS Group plc
Consolidated Balance Sheet
28 February 2001

                      28 February   29 February    31 August
                             2001          2000         2000
                      (Unaudited)   (Unaudited)    (Audited)
                            £'000         £'000        £'000

FIXED ASSETS
Intangible assets            6040          6102         5991

Tangible assets               449           498          468

Investments                     5             5            5
                       ----------    ----------   ----------
                            6,494         6,605        6,464
CURRENT ASSETS
Property held for resale        -           116          128

Debtors                    11,178        13,347       10,369

Cash at bank and in hand      642           162          502
                       ----------    ----------   ----------

                           11,820        13,625       10,999

CREDITORS:
Amounts falling due
 within one year         (11,467)      (12,696)      (9,892)
                       ----------    ----------   ----------

NET CURRENT ASSETS            353           929        1,107
                        =========     =========    =========
TOTAL ASSETS LESS
 CURRENT LIABILITIES        6,847         7,534        7,571

CREDITORS:
Amounts falling due
 after more than one year (4,547)       (5,066)      (5,067)

PROVISION FOR
 LIABILITIES AND CHARGES     (15)          (16)         (51)
                       ----------    ----------  ----------
                            2,285         2,452        2,453
                        =========     =========    =========
CAPITAL AND RESERVES
Called up share capital       182           182          182

Share premium account       5,509         5,508        5,509

Profit and loss account   (3,406)       (3,238)      (3,238)
                       ----------    ----------   ----------
EQUITY SHAREHOLDERS'
 FUNDS                      2,285         2,452        2,453
                        =========     =========    =========


SBS Group plc
Consolidated Cash Flow Statement
For the six months ended 29 February 2000

                      6 months to   6 months to 12 months to
                      28 February   29 February    31 August
                             2001          2000         2000
                      (Unaudited)   (Unaudited)    (Audited)
                 Notes      £'000         £'000        £'000

Net cash (outflow)/
 inflow from operating
 activities          7      (314)         (969)          519

Return on investments
 and servicing of
 finance                    (410)         (243)        (449)

Taxation                      231          (71)      (1,634)

Capital expenditure
 and financial
 investment                  (76)         (171)        (149)

Acquisitions and
 disposals                      -       (3,818)      (4,053)

Equity dividends paid       (100)         (229)        (311)
                       ----------    ----------   ----------
Net cash outflow
 before financing           (669)       (5,501)      (6,077)

Financing                   (471)         4,399       4,511                   
                       ----------    ----------   ----------
Decrease in cash     8    (1,140)       (1,102)      (1,566)
                        =========     =========    =========


SBS Group plc Notes to the Interim Statements



1. Basis of preparation

The  interim report has been prepared on the basis of the
accounting policies set out in the Group's 2000 statutory
accounts.  The  interim  report is  neither  audited  nor
reviewed  and  does  not  constitute  statutory  accounts
within  the  meaning of section 240 of the Companies  Act
1985.  A copy of the Group's 2000 statutory accounts  has
been filed with the Registrar of Companies.  The auditors
opinion on those accounts was unqualified.

The  interim report for the six months ended 28  February
2001  was  approved by the Board on 27th April  2001.   A
copy  of  this  report has been sent to shareholders  and
further  copies  of  this report are available  from  the
Company's  registered  office at Centre  Point,  103  New
Oxford Street, London, WC1A 1DY.


2. Segmental analysis
                      6 months to   6 months to  12 months to
                      28 February   29 February     31 August
                             2001          2000          2000
                      (Unaudited)   (Unaudited)     (Audited)
                            £'000         £'000         £'000
Turnover
United Kingdom              9,774        11,475        20,507
Continental Europe          4,338         5,116         9,883
North America               8,994         6,275        16,054
                       ----------    ----------    ----------
                           23,106        22,866        46,444
                        =========     =========     =========

                      6 months to   6 months to  12 months to
                      28 February   29 February     31 August
                             2001          2000          2000
                      (Unaudited)   (Unaudited)     (Audited)
                            £'000         £'000         £'000

Operating Profit before
 exceptional administrative
 expenses and goodwill
 amortisation
United Kingdom                355           542           975
Continental Europe             89         (192)         (261)
North America                 347           577         1,378
Central Overheads           (354)         (374)         (711)
                       ----------    ----------    ----------
                              437           553         1,381

Exceptional administrative
 expenses (note3)           (259)          (85)         (216)
Goodwill amortisation       (156)         (101)         (242)
Net interest charges        (410)         (243)         (638)
                       ----------    ----------     ---------
Profit on ordinary
 activities before tax      (388)           124           285
                        =========     =========     =========


3. Exceptional administrative expenses

The   exceptional  administrative  expenses   relate   to
reorganisation  costs associated with  merging  the  back
offices  for  the  UK  and European operations  and  also
redundancy costs associated with the above together  with
redundancy  costs to restructure the operations  in  line
with current trading.


4. Taxation

The  tax  recoverable has been recognised at  an  average
rate of 34%.  Taxation payable was provided at an average
rate of 32.9% in 2000.


5. Earnings per share

The  calculation of earnings per share is based on a loss
of £292,000 and a weighted average of 9,099,975 shares in
issue.

The  calculation of fully diluted earnings per  share  is
based  on  a  loss  of £292,000 and an adjusted  weighted
average of 9,099,975 shares in issue.

The  calculation  of earnings per share  before  goodwill
amortisation  and  exceptional  costs  is  based  on   an
adjusted  loss  of  £16,734 and  a  weighted  average  of
9,099,975 shares in issue.


6. Dividend per share

No interim dividend is proposed for the period.


7. Net Cash Flow From Operating Activities


                  6 months to       6 months to    12 months to
             28 February 2001  29 February 2000  31 August 2000
                  (Unaudited)       (Unaudited)       (Audited)
                         £000              £000            £000

Operating profit          118               367             923
Depreciation of tangible
 fixed assets              91                69             167
Amortisation of
 intangible fixed assets  156               101             242
Increase in debtors   (1,097)           (1,133)             632
Increase/(decrease)
 in creditors             418             (373)         (1,445)
                   ----------        ----------      ----------
Net cash (outflow)/
 inflow from
 operating activities   (314)             (969)             519
                   ----------        ----------      ----------


8. Reconciliation of Net Cashflow to Movement in Net Debt

                  6 months to       6 months to    12 months to
             28 February 2001  29 February 2000  31 August 2000
                  (Unaudited)       (Unaudited)       (Audited)
                         £000              £000            £000

Decrease in cash in
 the period           (1,140)           (1,102)         (1,566)
(Increase)/decrease
 in debt and lease
 finance                  471           (4,378)         (4,490)
                   ----------        ----------      ----------
Change in net debt
 resulting from
 cash flows             (669)           (5,480)         (6,056)

Loans and finance leases
 acquired with
 subsidiary undertakings    -              (34)            (34)
Currency translation
 movement                 202             (118)           (224)
                   ----------        ----------      ----------
Movement in net
 debt in the period     (467)           (5,632)         (6,314)
Net debt at
 start of period      (8,976)           (2,662)         (2,662)
                   ----------        ----------      ----------
Net debt at
 end of period        (9,443)           (8,294)         (8,976)
                    =========         =========       =========



                                                       

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